Think Gold and Silver are Due for a Bounce? Then Buy These 4 ETFs | The Mesh Report

Think Gold and Silver are Due for a Bounce? Then Buy These 4 ETFs

The Gold Enthusiast December 13, 2021 Comments Off on Think Gold and Silver are Due for a Bounce? Then Buy These 4 ETFs

Precious metals have long been reliable investments in the face of rising prices for consumer goods. However, gold and silver prices have declined this week as the investors anticipated the Fed’s policy decision in response to the latest inflation report. But despite seemingly heading for a fourth straight decline this week, spot gold prices rose 0.1% to $1,776.23 per ounce, while spot silver prices gained 0.2% to $21.97 an ounce on December 10.

Analysts at the investment banking firm Société Générale S.A (SCGLY) expect gold prices to trade at around $1,900 per ounce by the second quarter of 2022 because they do not anticipate interest rate hikes before then despite the Fed’s hawkish stance. In addition, inflation has accelerated at its fastest pace since June 1982, with the Consumer Price Index (CPI) rising 6.8% year-over-year for November, which could make precious metals a better store of value than the greenback.

Hence, we think it may be reasonable now to invest in the gold and silver ETFs of SPDR Gold Shares (GLD – Get Rating), VanEck Vectors Gold Miners ETF (GDX – Get Rating), iShares Silver Trust (SLV – Get Rating), and Global X Silver Miners ETF (SIL – Get Rating) as a hedge against the rising inflation.

Click here to check out our Gold and Silver Industry Report for 2021

SPDR Gold Shares (GLD – Get Rating)

GLD as an investment aims to reflect the performance of the gold bullion price before fees and expenses. The trust holds gold bars from time to time but mostly holds shares that reflect the price performance of the gold bullion. The trust can be used as a short-term position to hedge against equity market volatility and inflation.

Tracking the LBMA Gold Price PM ($/ozt) index, as of December 9, GLD had $56.11 billion in assets under management. The fund has a 0.40% gross expense ratio , which is lower than the 0.44% category average. Over the past month, its fund flows were  $470.92 million. GLD has a $165.95 NAV.

The ETF has declined marginally over the past five days to close yesterday’s trading session at $165.88, GLD has a 0.09 beta.

VanEck Vectors Gold Miners ETF (GDX – Get Rating)

GDX seeks to replicate the performance of the NYSE Arca Gold Miners index before fees and expenses. The non-diversified fund usually invests 80% of its total assets in depositary receipts and common stocks of the gold mining industry, thereby delivering an ‘indirect’ exposure to gold prices.

As of December 9, the fund had $13.10 billion of total net assets and has an expense ratio of 0.51%, versus the 0.46% category average. The fund’s top holdings, as of November 30, included Newmont Corp. (NEM), with a 13.73% weighting, Barrick Gold Corporation (GOLD), with 10.57% weighting, and Franco-Nevada Corporation (FNV), with 8.22% weighting . Over the past month, its fund flows were $64.87 million.

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